Comparison with Our Needs:

We can further test our performance by juxtaposing it with our requirements. Admittedly, it is very difficult to determine 'needed' rate of growth which would involve several non-economic, social and psychological variables such as people's hopes, desires and rising expectations. Some estimates nevertheless, have been made to determine needed rate of growth to meet specific commitments. For example, using estimates on such variables as the labour force growth, employment potential actually realised and the employment-investment-ratio, Subramaniam Swamy estimated that ensuring full employment within 10 years would require a 10 per cent annual rate of growth. A similar rate of growth in investment income will be required to "guarantee acceptable minimum level of consumption within the foreseeable future". Taking cue from the Newly Industrialising Countries?Japan, Hong Kong, Taiwan, South Korea, Singapore?we can be reasonably sure that a 10 per cent annual growth in national product can produce at least the first phase of economic transformation. To obtain a 10 per cent economic growth rate, the investment rate must be some 35 to 40 per cent. Against this, our best achievement has been only about 27 per cent or so. 

An alternative simple way is to find if the increase in national income has made any dent on poverty that we inherited from the Britishers in 1947. We know poverty in India is still widespread. According to a recent estimate made by the Planning Commission using norms of calorie consumption, the percentage of population below the poverty line in 1999-2000 may be projected at 27.09 per cent in rural areas and 23.62 per cent in urban areas; although the exact estimates are debatable, there can be no doubt of the order or magnitude of the problem of poverty.